More than 120 jobs might be lost at the Orb Electrical Steelworks plant in Newport, South Wales as part of a major restructuring designed to make the plant more ‘sustainable and competitive.’
The Newport plant’s operator Cogent Power, a subsidiary of Tata Steel, said the move comes as European demand for grain oriented electrical steels, manufactured at the Orb Electrical Steelworks facility, fails to recover from the economic crisis.
"We are faced with reduced demand for electrical steels and a highly competitive global market place,” said the company’s managing director Stuart Willie.
“That is unlikely to change in the medium term. European demand for the grain oriented electrical steels we make is still more than 20 per cent down on 2008 levels and we see high levels of imports into Europe. We anticipate it will be several years before demand returns to 2008 levels."
Grain oriented electrical steels, the main product of the Newport plant, are used to manufacture energy efficient transformers and large high-performance generators.
According to the announcement, 83 employees could be made redundant plus further 40 contractors could lose their work at Orb Electrical Steelworks as part of the endeavour to offset the declining demand.
"This is going to be a difficult time for all concerned but the changes we are making are essential for the long-term future of the operations at Orb. Every effort will be made to support employees and, where practicable, achieve job losses through voluntary redundancies, whilst retaining critical skills and experience for the future,” Willie said.
Commenting on the announcement, Roy Rickhuss, general secretary of the Community union said the UK government should help the local steel industry to handle the crisis by freezing the Carbon Price Floor and providing relief from the renewables obligation, which both lead to growing energy costs for the manufacturing businesses.
"This is yet another example of how the economic recovery isn't reaching the European steel industry and the UK in particular,” Rickhuss said.
"If the UK economy is going to be rebalanced then we need our foundation industries to survive then thrive. Sadly, today's announcement by Tata Steel shows the level of the challenge in front of us."
He also pointed out that only a few years ago, Orb was one of the few facilities in the field that operated profitably.
"This is disappointing news for the workforce and for the local community. The workforce at Orb has done everything asked of it - it's a fully flexible and multi-skilled operation, so today's announcement will be a bitter blow,” he said.